Heavily indebted French computer games developer Infogrames reached a deal with its bankers yesterday to see it through the crucial Christmas trading period.
Europe's largest creator of video games is also working on a refinancing of €117m (£81m) worth of bonds which are due to convert into stock next year and has been worrying investors for some time.
Shares in the company, a majority owner of Atari, were suspended in Paris early yesterday raising speculation in Britain that it was plotting a bid for British rival Eidos.
Infogrames said trading in its stock had been halted while it prepared a statement about its finances. The company, which has a 57% stake in console pioneer Atari, added that it expects sales for the last three month to be in line with the guidance it gave analysts over the summer.
Infogrames is predicting a slight increase in sales to between €95m and €105m when it reports its figures next Friday. In the same quarter last year the company achieved sales of €92.5m. When trading in Infogrames stock restarted late in the day the shares rose 13% on the Paris bourse.
When news of the suspension of Infogrames' shares reached the City of London, Eidos shares raced ahead as traders speculated about a possible bid for the creator of action heroine Lara Croft.
Despite the fact that Infogrames' own finances are in a parlous state and the company said it was not in any bid situations, Eidos's shares still ended the day up 3.5p at 88.5p valuing the business at £125m.
Four years ago Eidos aban doned talks with Infogrames as the two sides were unable to reach an agreement on price. Since then both businesses have seen their prospects fade. Eidos has warned repeatedly on profits while Infogrames has got itself into something of a financial hole after a succession of acquisitions which have made it Europe's largest independent games maker.
In August Eidos admitted it was back in talks with a number of potential bidders, but Infogrames was not among those fingered by analysts as interested.
Over recent months Infogrames itself has become a potential takeover target with speculation centring around potential US interest.
Chairman Bruno Bonnell said: "Infogrames is not involved in any discussions regarding a friendly or hostile bid."
